IIR Industry Alert: Russias Oil Major Has Capacity And Export Drive To Ride Through Caspian Kurmangazy Field Rights Blow

Earlier this year Russia and Kazakhstan agreed to divide their sectors of the Caspian Sea and work jointly on disputed oil fields including Kurmangazy in the Kazakh sector.

Houston-August 6, 2002-Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). A week (July 29 to August 2) is a long time in the business of oil politics for Lukoil (LSE:LKOql) (RTS:LKOH) (Moscow, Russia), Russias largest oil company which has been buffeted by the international and inter company storms surrounding oil rights around the Caspian littoral. In the same week in which the Russian government awarded and formalized Lukoils rights to develop the countrys share in the Khvalyskoye field the company has lost out on its long expected right to share in the latest potential Caspian bonanza in Kazakhstans Kurmangazy field.

Meanwhile in London, Russia was preparing to sell 6% of its 14% stake in Lukoil for over $700 million. Russia is in its second year of slow growth and will see foreign debt payments peak at about $17 billion next year. At least this was no surprise for Lukoil as it had been scheduled as part of the states privatization plans for some time. But the surprise was yet to come for Lukoil, as by the end of the week the Russian government suddenly cancelled the sale saying that it did not need the cash badly enough to accept the investors price. Amid all this headspinning and posturing Lukoil confirmed that it would go ahead this week on August 6 with its plans to become the first Russian company with a full listing on the LSE.

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